The belief SMSF trustees were using their super savings irresponsibly in retirement and withdrawing their superannuation as a lump sum as soon as they could is unsubstantiated, says the sector’s peak professional body.
SMSF Professionals’ Association of Australia (SPAA) director of technical and professional standards Graeme Colley said the latest Australian Taxation Office (ATO) figures revealed in the five years to 30 June 2012, benefit payments from SMSFs averaged $18.9 billion a year.
“The importance of this number is the fact that by far the biggest percentage of these payments are made as allocated or account-based pensions – and this figure is growing,” Colley said.
“In 2008, all pension payments totalled 64 per cent, but by 2012 the figure had grown to 72 per cent, with the average benefit payment being $99,000 a year and the median payment $52,000 a year.
“From SPAA’s perspective, this is strong evidence that SMSF trustees are using their superannuation correctly – they are funding their retirement in a responsible way by drawing income streams when they reach retirement.”
The figures dismissed the myth that SMSF members withdrew their superannuation as a lump sum as soon as they were able to and then started an aged pension, he said.
“The situation in the ATO statistics shows quite the opposite,” he said.
“They are looking at their SMSFs in their totality so as to be self-sufficient in retirement, appreciating they are on average going to live for about 20 years in retirement.”
Furthermore, there were more new SMSFs paying pensions in their first year of operation, with an increase of 15 per cent in the number of new funds over the five years to 30 June 2012, he said.
“This would suggest people want to take direct responsibility for handling their retirement incomes, a trend SPAA encourages,” he said.
“Our only proviso is that these people appreciate everything that’s involved in being an SMSF trustees and, when necessary, seek professional advice.”
